CIBC agrees $149.5m settlement with Lehman Estate 2 January 2013 | 09:06am StockMarketWire.com - Canadian Imperial Bank of Commerce has reached a settlement with the Lehman Estate.
CIBC recognized a gain of US$841m following the bankruptcy filing of Lehman Brothers Holdings in September 2008 resulting from the reduction to zero of an unfunded commitment on a variable funding note (VFN) issued by a collateral debt obligation.
This reduction followed certain actions of the indenture trustee for the CDO following the bankruptcy filing of Lehman, the guarantor of a related CDS agreement with the CDO.
In September 2010, the Lehman Estate instituted a proceeding against numerous global financial institutions, indenture trustees and note-holders, including CIBC, relating to this and more than 40 other CDOs, claiming that the indenture trustees' actions were improper and that CIBC was obligated to fund the VFN.
Under the terms of the agreement, CIBC will remit US$149.5m ($110.3m after tax) to the Lehman Estate.
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